Promoting sustainability, good governance and transparent business practices

Launched by the SEM in September 2015, SEMSI tracks the price-performance of those companies listed on the Official Market or the Development & Enterprise Market which demonstrate strong sustainability practices.

SEMSI provides a robust measure of listed companies against a set of internationally aligned and locally relevant environmental, social and governance (ESG) criteria. It offers a useful tool for domestic and international investors with an appetite for responsible investment in frontier markets.

Background

There has been, over the past few years, an increasing awareness at the corporate level in Mauritius about the need to include the sustainability variable in the business equation. Given its pivotal role in the economy, the SEM found itself in a unique position to bring its support to those listed companies which are already actively pursuing sustainability initiatives, while also facilitating responsible investment.

By setting up SEMSI, the SEM has taken a leading role in creating a more sustainable capital market. This forward-thinking initiative makes SEM the second Exchange in sub-Saharan Africa to promote sustainability through a Sustainability Index.

Criteria

SEMSI has an integrated approach and takes into consideration all four key pillars of sustainability (economic, environmental, social and corporate governance).

The SEMSI criteria of eligibility are based on the Global Reporting Initiative G4 Guidelines and are aligned with international ESG and related sustainability issues, while also taking local imperatives into account.

The criteria are intended to be up-to-date and developed over time, with the aim of encouraging constant improvement in sustainability performance.

Creating value for investors

- Helping investors make better informed investment decisions.- SEMSI constituents have been screened against established ESG criteria. - There is a potential share price premium for companies meeting the minimum criteria to be included in SEMSI.- SEMSI comprises diversity in sectors of activity and market capitalisation. - SEMSI provides an incentive for higher quality reporting and disclosure. - SEMSI may be used to develop new investment products.

Creating value for listed companies

- Incentivising investors. - Reputational benefits.- Promoting stakeholder engagement and inclusiveness.- Expanding their business horizons and working towards long-term viability and resilience.- Benchmarking against international standards and peers. - The assessment methodology of SEMSI provides guidelines for companies on what to measure and where to improve. This can help companies understand and manage their social and environmental risks and opportunities.